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Website Value Best Determined By Its Profit

website profit

© 2016 by Scott Bateman

Web publishers often debate website value, but they tend to focus on the wrong number.

A common practice is to base the value almost entirely on revenue, but it is profit that reveals much more about a site’s true worth.

The price for a publicly traded stock of a major business is about 15 times its earnings or profit at the time of this writing.

Corporations also measure value using revenue, the revenue metric doesn’t matter so much when a company is losing $1 billion a year. A website is a business and is best measurable the same way. (more…)

stored in: Management and tagged:

10 Steps for Promoting Your Business Online

Local businesses have a compelling need to advertise their existence to attract customers in order to grow and stay profitable. These days they also have a compelling need to advertise online.

It is easy to imagine that most businesses will find that local online advertising is both necessary and even quite inexpensive to do.

The hard part is knowing where to begin and how to do it right. (more…)

stored in: Advertising and tagged:

First Site Priorities: Keep Efforts Free, Quick and Simple

Website prioritiesThe owner of a small business website should look for ways of growing it that are free, quick and simple.

The Internet is loaded with experts who talk about big ways of making money online, but they often leave out the cost and effort required to get there.

The Internet also is loaded with services for sale that are beyond the reach of a small business.

Even worse, some businesses end up paying thousands or even tens of thousands of dollars on something they could have bought for hundreds of dollars instead. That statement is not an exaggeration. I have talked to the owners of many such companies.

In some cases, certain products and services are even available for free.

Time and money are two of the most precious resources available to a small business owner. Each one must be used carefully to maintain the business if not grow it. (more…)

Website Management Needs Cost Controls in Slowing Economy

Revenue decline

© Promise Media LLC

Smart website management requires a balance of both revenue and expenses to achieve a healthy profit and healthy growth.

When the economy is growing strongly, it is of course much easier to grow revenue as well.

Businesses spend more on advertising, they make more money and they often increase their advertising budgets in response to their growth in revenue.

Websites that rely on advertising for most if not all of their revenue will benefit greatly from this increase in advertising.

They may even be tempted to increase their expenses by using the profits to invest in content, people and technology.

So revenue in a strong economy drives growth and brings the expenses along with it.

(more…)

stored in: Management and tagged: , ,

Website Profit Balances High Margin, High Growth

Online profitWebsite profit is often a choice between high profit margin versus high revenue and audience growth.

It is one of the most important choices a publisher or webmaster can make for a Web site financial plan.

It is tempting to chase a high profit margin, but excessive margins are a positive in the short term and a negative in the long term. No business can maintain an unreasonably high margin over time without undermining growth or creating an opportunity for competitors.

Media sites in the early days lost a great deal of money and were seen as a drag on their parent companies. Now the opposite is true for some sites: Their parent companies need to boost sagging profits and are pushing for higher margins out of their Internet operations. (more…)

stored in: Management and tagged: ,
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